Dell founder back in charge of ailing computer firm

The founder of the troubled Dell computer company, Michael Dell, took back day-to-day control of the American manufacturer last night following the abrupt resignation of its chief executive, Kevin Rollins.

Mr Rollins quit with immediate effect as the Texas-based company issued a profit warning admitting that its earnings would be below Wall Street forecasts for the three months to January.

The change followed months of rumours about trouble at the top of Dell, which has suffered a series of blows culminating in the loss of its title as the world's biggest computer maker to Hewlett-Packard.

Last summer, the company was forced to recall four million laptops because of a tendency for their batteries to catch fire. The US financial watchdog, the securities and exchange commission, has been investigating possible balance sheet irregularities at the firm.

Mr Dell, who established the company in his college dormitory room with $1,000 in 1984, hand-picked Mr Rollins to be his successor when he stood back to become chairman in 2004.

In a statement issued after the stock market closed last night, Mr Dell said: "Kevin has been a great business partner and friend. He has made significant contributions to our business over the past 10 years. I wish him much success in the future."

There was no word on how much compensation for loss of office Mr Rollins will get. Including gains on exercising share options, he received $39m (£20m) in remuneration in the year to January 2006.

Dell made its name by cutting out the middle man and selling computers directly to consumers. But it has alienated customers through poor service - at one point, the average waiting time at its call centres was nine minutes.

Charles Wolf, an analyst at Needham & Co, said the company's finances had been deteriorating: "There's been no turnaround and the bottom line is that Michael is the one who built the company. On balance I would say this is probably a necessary move."

As recently as September, Mr Dell was standing by Mr Rollins - he described him as an "outstanding" executive at one technology conference and told reporters that they ran the business together: "If you want to blame someone, you can blame me too."

The presiding director on Dell's board, Samuel Nunn, last night said Mr Dell's "vision and leadership" were critical: "There is no better person in the world to run Dell at this time than the man who created the direct model and who has built this company over the last 23 years."